RISK MANAGEMENT IN BANKING: ASSESSMENT AND DEVELOPMENT OF EFFECTIVE STRATEGIES

Abstract

The article examines risk management in banking activities, focusing on methods for assessing financial risks and developing effective strategies to minimize the adverse impact on the stability and performance of banking institutions. It analyzes key types of risks faced by commercial banks, including credit risk, market risk, liquidity risk, operational risk, and reputational risk, and explores contemporary approaches to both quantitative and qualitative evaluation. The study emphasizes the importance of implementing a comprehensive risk management framework that integrates modern analytical tools, forecasting techniques, and data-driven decision-making processes. Special attention is paid to the application of stress testing, scenario analysis, and risk modeling in identifying potential threats and vulnerabilities. Furthermore, the article discusses the strategic alignment of internal risk management policies with national and international regulatory standards, highlighting best practices that enhance transparency and compliance. Challenges associated with digital transformation, technological innovation, and emerging financial instruments are also considered, demonstrating the need for adaptive and forward-looking strategies. The practical significance of the research lies in its potential to improve operational efficiency, strengthen financial stability, and support long-term resilience of banking institutions. The findings provide both theoretical insights and actionable recommendations for bank managers, regulators, and financial analysts seeking to optimize risk management processes and mitigate negative consequences in a complex and dynamic financial environment.Additionally, the article highlights the role of organizational culture and internal governance in effective risk management, emphasizing that successful implementation of risk strategies depends not only on technical tools but also on the active involvement of personnel at all levels of the bank. The research underscores the significance of continuous monitoring, early warning systems, and real-time reporting mechanisms to promptly identify deviations from expected risk parameters and to implement corrective measures.